In case you missed it, this article first showed up in the New York Times. Today, its in the San Jose Mercury News (Silicon Valley).

I find that interesting.

Diane

[Fair Use: For Educational/Research Purposes Only]

Published Sunday, May 30, 1999, in the San Jose Mercury News

Attention shifts from repair to Y2K disruptions

New York Times

http://www.mercurycenter.com/premium/business/docs/y2k30.htm

DONALD Rose, the head of Intel Corp.'s global drive to prevent year 2000 computer problems from derailing microchip production, is focused these days on 500 critical suppliers of materials and basic services like power and telephones.

About half are ready for the date change, Rose says. Intel is busy dispatching training, testing and auditing help to the others -- many of them abroad -- in the hope they will catch up. But hope is a high-risk business strategy, so Intel has begun buying backup generators, interviewing alternative suppliers and making other preparations for breakdowns.

It has plenty of company. The race to repair and test computers that has so far dominated the year 2000 scene is far from over. But planning to cope with what might go wrong, until recently on the ``do later'' part of the agenda, is now in full swing.

After months of weighing options, businesses and governments are acknowledging that some disruptions are inevitable when computers encounter dates beyond 1999 and that they now face deadlines for investing in contingency plans. As is Intel, most are worried less about failures in their own systems than how they will respond to breakdowns in the supplies, transportation or communications links on which they depend.

As the plans are developed, millions of workers who previously had little exposure to Y2K, as the year 2000 problem is known, are getting their first good look at how seriously their employers are taking it.

It is not a subject that executives and their project leaders like discussing in any detail. Unlike most repair work, contingency plans have to take into account not just the computer user's own systems, but all the outside forces the user cannot control, like public power, telephones, water and the readiness of both suppliers and major customers. The planners fear offending partners, inviting lawsuits and, in some cases, alarming customers or the public.

The Securities and Exchange Commission has told publicly traded companies to describe their year 2000 contingency planning in their quarterly reports to the agency, but most are sticking to a few vague sentences indicating they are working on it.

The heart of the plan in many cases is likely to be arranging for more employees than normal to be on duty in the weeks before and after New Year, often to make sure a company can fall back on nonelectronic methods of business, such as taking shipping orders by phone.

Vacations canceled

Vacations are being canceled and major computer users like Paine Webber are booking hotel rooms for New Year's Eve in back-office sites like Weehawken, N.J., to make sure technicians are near their data processing centers.

It is also clear that growing confidence that major disruptions are unlikely -- at least in the United States -- is putting pressure on managers not to propose costly investments. Consultants like Gartner Group say the sums budgeted for contingencies will average 10 to 15 percent of the hundreds of billions of dollars projected as the global tab for year 2000 repairs and testing.

Still, the effort is opening a new window on how seriously the world is taking the year 2000 challenge. The problem stems from decades of using two digits to represent the year in dates. Computers, software and electronic devices may malfunction if they read 00 as 1900 or do not understand that it is a date.

Most year 2000 contingency planning by big computer users is aimed at coping with local disruptions similar to those society often experiences from equipment failures, bad weather and earthquakes. But big enterprises are also considering how to respond to a global blitzkrieg of disruptions.

``The danger of Y2K is a wide variety of things hitting simultaneously,'' said Charles Snyder, head of the year 2000 project at Levi Strauss & Co. in San Francisco.

Levi has scrutinized how it might shift or delay production of its jeans and other products factory by factory. Snyder advocates ignoring the nature of specific year 2000 problems and simply looking at whether the interruption at a factory would be a matter of hours, days or longer.

``You'd go insane if you try to handle it without some kind of streamlined game plan,'' he said.

Intel has begun installing extra power generators at factories in Asian countries and Latin American countries with shaky power grids. And its purchasers and technicians have been visiting companies it does not buy from today to see if they could step in if a supplier faltered.

``It takes us up to six months to qualify a supplier of something like specialty chemicals'' to meet Intel's quality standards, said Rose, the company official leading the effort.

Business leaders hope contingency planning will reinforce the prevailing cautious optimism that the year 2000 challenge is being met. ``It shouldn't signal a sense of alarm,'' said Dana Bennett, who has overseen the year 2000 project at Aetna, the insurance giant based in Hartford.

Jay Golter, co-founder of the Northern Virginia Year 2000 Community Action Group, disagrees. ``It's just human nature that planning for disruptions will make people who haven't been paying attention more nervous,'' he said. But if nervousness raises consciousness, he said, the public will benefit.

Wide planning

Clearly the planning is going well beyond redeploying the army of technicians that have done most of the repair work.

Humana Inc., the health insurer based in Louisville, Ky., is turning to front-line employees like Zach Riser, who runs the mail room in its Louisville service center, for such jobs as lining up backup carriers for documents and overnight packages.

Last month, many utilities drilled field employees who will be stationed at power plants and distribution sites over the New Year holiday on how to use radio and other backup communication systems to deliver vital data that normally flow electronically to command centers.

At first glance, year 2000 contingency planning looks relatively simple. Many large businesses and other major computer users can start with plans they already have for computer crashes and natural disasters.

Moreover, many actions are minor adjustments. The state of Washington's National Guard plans to mobilize 3,000 soldiers, about half its ground forces, in December to be available to help deal with loss of utilities, water or other essential services or to quell potential civil disorder. The plan is virtually cost free because the same soldiers would otherwise have been reporting for routine training a few weeks later.

Lubbock, Texas, is buying materials for 1,200 stop signs in one order this fall instead of spacing them out through the fiscal year ending Sept. 30, 2000, and is suspending its normal replacement program. ``We will have about 800 on hand in case traffic signals don't work Jan. 1 instead of the usual 50 or so, but it won't add to my budget for the year,'' said Geryl Hart Jr., manager of Lubbock's traffic department.

It gets complicated

But experts say year 2000 contingency planning becomes complicated because the possibilities are more varied than in typical disruptions. Humana's standard 20-page disaster recovery plan for its regional service centers swelled to 66 pages when adapted for year 2000 problems.

Training, staffing and equipment-decision deadlines are also looming for some. Automakers say they need to settle contingency plans in the next month to take advantage of summer production shutdowns for training.

Union contracts require Kaiser Health Plans to make up its mind -- and negotiate next month -- for extra hourly employees it wants on duty for the New Year holiday, according to Deborah Reinhold, director of Kaiser's year 2000 project.

And McKesson HBOC, the drug distributor based in San Francisco, said it had to make its decision to order eight large backup diesel generators from Caterpillar Inc. by May 5 to get guaranteed installation by the end of the year.

Companies also need to worry about what happens if too many others are thinking about the same backups they expect to use. Take all the companies planning to rent generators. ``There's no way in the world our industry could supply the demand that is in the planning stages,'' said Mark Conrad, U.S. marketing director for Aggrecko, the Dutch company that owns the world's largest rental fleet of mobile generators.

Howard Rubin, a technology consultant, says some of the toughest decisions may lie with industries like banking and telecommunications that could be flooded with consumer inquiries on Jan. 1 at the slightest sign of any glitch. ``If those companies are understaffed and callers just get busy signals, it will contribute to panic,'' he said.

Consultants say a few shortcomings show up repeatedly in plans they see. Many companies, for example, are not ready to confirm and evaluate disruptions quickly.

``When a global company gets a call from Thailand from someone saying the lights went out, how does it rapidly figure out if it's a Y2K problem, how widespread it is, whether it will persist and what others will do?'' Rubin asked.

Louis Marcoccio, head of Gartner Group's year 2000 research program, says another failing is assuming that contingency plans are needed only for the first week of the new year. Gartner estimates that fewer than 10 percent of software failures will show up that quickly.

-- Diane J. Squire (sacredspaces@yahoo.com), May 30, 1999

Answers

Time for a latte... again.

*Sigh*

Diane

-- Diane J. Squire (sacredspaces@yahoo.com), May 30, 1999.

Diane,

Thanks for this posting. It is important to know what the folks in "the battle field" are doing. And how they are reading the "signs." This is good current information that helps to keep us focused.

-- Gordon (gpconnolly@aol.com), May 30, 1999.

I find it interesting that these companies/unions assume by mandate that people will show up for work. Putting aside a natural inclination to want to be with family during a potential crisis, will mass transit, automobiles and traffic signals be functional? For example, if you knew a hurricane was about to hit your area, would you go to work? It would take more than an "order" from my employer to get me there.

-- anon (anon@anon.com), May 30, 1999.

Diane, yes,thank you for the informative post.Also, happy prelated or belated birthday! :)

Sincerly, Feller

-- Feller (feller@wanna.help), May 30, 1999.

anon:

Good point. There is a limit to any contingency planning, and you pretty much have to assume that the limit won't be exceeded, or else no contingency plan of any kind can work at all. It's good to see some companies doing all they can, and taking it very seriously. But there are always going to be circumstances beyond your control. You just have to do all you can to address circumstances within your control as well as you can, and hope for the best. At least this way you'll be as ready as possible for any situation that isn't totally hopeless.

-- Flint (flintc@mindspring.com), May 30, 1999.

anon,

I too am continually surprised at the assumption that a critical mass of people will go to work. Does anyone remember reading a statistic about people not showing up for work during the Ontario ice storms? I seem to remember they started to stop showing up after 5 days or so. Talk about your domino theory - "half my fellow employees aren't at work; nothing is happening - what's the point of me going to work?" I've always been a decent employee, but my God, unless I work at a hospital or something, I wouldn't risk it. Would you?

-- Goombah (goombah@aol.com), May 30, 1999.

A little while ago,Levi stated that one of its biggest difficulties in its Y2K contingency planning was trying to forecast the sales for next year.Apparently most sales of jeans in particular are triggered by people buying a new pair when they go on holiday.

This was the only public reference I have seen to question the effect Y2K could have on consumer spending...something we personally are very concerned about & which impacts on our own production targets this year & next.

-- Chris (griffen@globalnet.co.uk), May 30, 1999.

Interesting reading, Diane. (Happy Birthday) I wish I could remember at what point CH suggested contingency plans were all that was left to do and needed to be implemented ASAP. I know it was several (as in many) months ago. But then, he wasn't the only one who suggested it at around that same time....several months ago, once again. Better late than not at all...maybe. It "could" make a big difference for them to begin forming contingency planning seminars with suggestion boxes posted at each door...perhaps....hmmmmm. Nope. Don't think so. But look...it's really kickin' up some dust on the horizon. MOOOOOOOOOO

-- Will continue (farming@home.com), May 30, 1999.

Actually Will continue (farming@home.com),

My birthday's in mid-June.

;-D

Quick report from "the silly-valley:" Tourists are out en masse at the local downtown farmer's market and nearby latte hang-outs. It's always a bit odd to see people with their wireless laptops, connected to the internet, while sipping coffee on a warm Sunday.

Talk about the "disconnected."

Diane

-- Diane J. Squire (sacredspaces@yahoo.com), May 30, 1999.

Will, if by CH you mean "Clueless Here", it was in the Day 500 WRP. At that time, it was Gary North type material. Today, that WRP seems more like the conventional wisdom.

Like Ed, I'm trying to bow out of the discussions and debate to get my own house in order and help where I can. I'll keep writing the WRPs and will gather intel on what the scum and crooks in DeeCee are up to.

That NYT article is old news. If you drag the WRP archives, you'll see similar reports from almost a year ago.

Good luck to all. Take care.

-- cory (kiyoinc@ibm.XOUT.net), May 30, 1999.

Dang Cory...If I hadn't of been so lucky as to have found my soul- mate 14 years ago.....I'd stuff you into MY shed for New Years Evil, you cute little "local boy"! Hahaha (grew up moving back and forth between Hawaii and Wyoming....go figure)Ever hear of Kaupo Ranch, Hanna Maui (let's all sing a couple of bars of Hasagawa's General Store)! I knew it was 500....sarcasm ooooozes from my DNA. Need eggs?

-- Will continue (farming@home.com), May 30, 1999.

Regarding employees "bugging out" of mandated work over the rollover, I think companies will use all of the clout they have, including threat, bonuses, even bringing families to work. IMHO, there will be a call to patriotism, a mission, long absent from our society, that will inspire critical service people (hospital staff, fire and police, water treatment, etc) to work the rollover. If companies can not provide for family, I think their threats and bonuses will fail in direct proportion to the distance employees are separated at work from their homes. If there is little that an employee can do to keep the company up and functioning and that becomes apparent prior to the rollover, I think employees will stay home.

-- leslie (***@***.net), May 30, 1999.

Cory,

In my humble opinion your contributions to y2k awareness have also been extraordinary. Your DC WRP's have provided an astronomical amout of information on y2k.

Many thanks for all of your efforts.

Ray

-- Ray (ray@totacc.com), May 30, 1999.